How Is HP Increasing Shareholder Value?



HP has returned $692 million to shareholders in fiscal 1Q18

In fiscal 1Q18, HP (HPQ) returned $230 million to shareholders via dividends and $462 million via share repurchases, bringing the total capital allocation to shareholders to $692 million. This is a rise of 12.9% YoY compared to $613 million returned to shareholders in fiscal 1Q17. The firm also returned $2.3 billion to shareholders in fiscal 2017.

HP has a dividend yield of 2.4% with an annualized payout of $0.56 per share and a dividend payout ratio of 28.9%. In comparison, Microsoft (MSFT), Western Digital (WDC), Seagate (STX), and IBM (IBM) have dividend yields of 1.8%, 2.2%, 4.7%, and 3.8%, respectively.

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Focus on research and development and acquisitions

We have seen that HP aims to further gain traction in the Personal Systems and Printing businesses by focusing on product innovation. HP is already increasing shipments in a mature PC market and is outperforming peers. Gartner expects customers to purchase products with higher functionality and quality, which might help HP to improve average selling prices and profit margins.

In fiscal 1Q18, HP spent $347 million on research and development, a rise of 17.2% YoY compared to spending of $296 million in fiscal 1Q17.


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